Legend

Nokia was making money, increasing amounts of it, until February 2011.
At the same time, Nokia was losing great amounts of marketshare. Not necessarily because Nokia was selling less, but because the smartphone market was rising exponentially and new users seemed to prefer androids and iphones.

So yes, a change had to be made.. at least regarding the internal competition of OS development teams that proved to be poisonous in the mid/long run and the tremendous flaws they had with slipping deadlines consecutively.

But whatever was happening at Nokia was nowhere near the total clusterfuck that was to yell at the world they don't believe in their own product (insulting all their customers and developers at the time), scrap every OS development they had at the moment and become exclusive to a mobile OS that, in February 2011, had already proven to be a commercial flop. All this in exchange for peanuts, compared to the company's revenues at the time.

Of course, this post is going to be quoted by the same people with the same old arguments saying "everything was doomed since the iphone no matter what and microsoft was their best chance because money".
It'll be quoted about 3 times with the same written stuff, making my post seem somehow false.

Veteran

Even swapping straight to android would have been more successfull imo.

Click to expand...

Maybe and maybe not, and that's really the only point I'm making. Nokia hasn't exactly had spectacular execution on the hardware side (some unique features but it took until 2013 to make something lightweight), and their delays in getting a WP out makes me think it would take a long time to get a compelling Android UI together. Combine the two along with starting from 0% in a market where the non-Samsung competition crush each other's margins and I see a very low ceiling with the Android route.

Nokia chose the higher risk route to chase higher rewards. It didn't work out as well as they planned, and maybe it could have been better with Android, but it could also have been worse.

The chance of success was slim either way. But there was a third option: do neither. Basically they could have chosen the situation they're in now, except earlier, with more negotiating power and money.

Click to expand...

How would they have more money and negotiating power? If they didn't go with either WP or Android, then they just become obsolete while also missing out on MS's payments.

App Store revenue is slim compared to device revenue. People don't spend anywhere near as much on software as they do on hardware. HW margins don't need to be particularly large to exceed 30% of that.

Click to expand...

Yup. This isn't the console space. Apps are generally cheap or free and ad supported.

Elop joined as CEO in Sep. 2010, the burning platforms memo was in Feb. 2011.

Click to expand...

People make graphs with the "Elop effect" are either naive or disingenuously promoting their pet cause. The timeline already proves that it's a reaction to declining sales rather than a cause, as all big corporations have a bunch of indicators of sales 1-2 quarters ahead. And, as I pointed out above, other aging platforms took major hits at exactly the same time.

Veteran

Regarding the charts:
The WinMo is disingenuous at best...it only shows a steady YoY decline from the start.

Click to expand...

Steady decline?!? WinMo lost over 50% of its sales from 1Q2011 to 2Q2011! The platform hadn't seen anything remotely that bad during it's whole existence.

No, it's not a single data point. RIM, WinMo, and the surge in iPhone and Android a few quarters earlier are all very clear indicators of how the market was transitioning at that time.

With a company whose primary markets are(were) completely complemetary. (RIM: Traditionally strong in NA, Nokia: market leader everywhere else). Where both companies faced different epic blunders of their own.

Click to expand...

That proves my point even more, as it shows they are independent observations. And what epic blunder did RIM make in 1Q2011? AFAIK, it was just plain old complacency that reared it's head when consumers flocked to the justified hype of Android and iOS.

Have you ever considered that this doesn't have to be a conspiracy?
Don't attribute to malice what can be attributed to stupidity.

Click to expand...

Um, how could I not consider that when I'm telling others the same? Was the memo stupid? I can't disagree with that. But did it have a big effect on sales? I really don't think so:
That looks like a pretty steady decline to me.

Regular

Nokia chose the higher risk route to chase higher rewards. It didn't work out as well as they planned, and maybe it could have been better with Android, but it could also have been worse.

Click to expand...

See, and that's the problem: Many people here aren't only arguing about the choice whether to sell WP or Android. I'm not so clear cut about that decision as well. My point, e.g., is that the execution was dumb, dumb, dumb, dumb, dumb beyond recognition.

People make graphs with the "Elop effect" are either naive or disingenuously promoting their pet cause. The timeline already proves that it's a reaction to declining sales rather than a cause, as all big corporations have a bunch of indicators of sales 1-2 quarters ahead.

Regular

Steady decline?!? WinMo lost over 50% of its sales from 1Q2011 to 2Q2011! The platform hadn't seen anything remotely that bad during it's whole existence.

Click to expand...

Learn to read quarterly numbers, dammit. YoY is what counts looking at a trend. Q2,3,4 all showed already sharp decreases over the years, only Q1 was steady. And the sharper decline in 2Q2011 (compared to 2010) isn't really surprising, considering the successor was now (somewhat) widely available.

No, it's not a single data point. RIM, WinMo, and the surge in iPhone and Android a few quarters earlier are all very clear indicators of how the market was transitioning at that time.

Click to expand...

Too bad that no one argued the point that the market was transitioning in itself.

And what epic blunder did RIM make in 1Q2011?

Click to expand...

Announcing that they would have super shiny new devices with a super shiny new OS in, say, about a year, maybe? (Sound familiar?)
Although I have to admit that I also thought about the Playbook debacle (No mail, No BBM), but that was later.

Um, how could I not consider that when I'm telling others the same? Was the memo stupid? I can't disagree with that. But did it have a big effect on sales? I really don't think so:
That looks like a pretty steady decline to me.

Click to expand...

Sigh. And you call others misleading. Market share was never the point here: Everyone knew and argued this. You should either look at others posts or look what kind of graph you're posting.

Oh, and one more thing: (hehe )

How would they have more money and negotiating power? If they didn't go with either WP or Android, then they just become obsolete while also missing out on MS's payments.

Click to expand...

Please. You can't use a premise that's under debate as a proof for your argument. Fullstop. That's classic begging the question.

Veteran

I was under the impression that Microsoft paid nokia a couple of hundred million dollars a quarter, but that nokia still paid a licence fee for every phone sold...with the NET effect of nokia giving Microsoft money..

This was my assumption based on a few interviews I read, im not stating this as a fact so please correct if wrong.

Legend

Well...ToTT does say exactly that in his third sentence, so what's your point?

Click to expand...

Not every time one quotes another means he's trying to say the opposite, sometimes one might actually just provide a link to strengthen a point in the quoted text, in this case the freefalling market share

Veteran

Learn to read quarterly numbers, dammit. YoY is what counts looking at a trend.

Click to expand...

Maybe you should heed your own advice. If I used YoY, then 1Q2009, 1Q2010, and1Q2011 show flat sales. Does that prove everything is peachy? Even with 2Q, it dropped 18% in 2010 and 45% in 2Q.

Obviously WinMo was in decline, but in early 2011 sales fell off a cliff. My observation stands.

Too bad that no one argued the point that the market was transitioning in itself.

Click to expand...

When you or others declare that Nokia could have made more money with an alternative strategy, that Elop wasted a cash cow, or that the losses were mostly the fault of the memo, then yes, you are indeed denying this transition which strikes at the bulk of Nokia's business at the time.

Announcing that they would have super shiny new devices with a super shiny new OS in, say, about a year, maybe?

Click to expand...

Oh give me a break. Long term product plans are known for many companies and are never a valid excuse for a precipitous sales drop. You're grossly overestimating the number of people who are aware of and affected by such announcements. BB10 wasn't demoed until May 2011 (and thus unable to affect May 2011 quarterly results, which is when sales dropped), and at that time it wasn't even known that existing devices could not be upgraded to it.

The point stands. Blackberry sales turned down right around the same time as Nokia's despite no association between the companies. They simply both had dead end operating systems across their product lines.

Sigh. And you call others misleading. Market share was never the point here:

Click to expand...

Of course market share is the point. If your sales can't keep pace with an increasing market, it's because you don't have competitive offerings. If Elop was so devastating, why isn't there any drop in the marketshare trajectory when he arrived? What's your explanation there?

Please. You can't use a premise that's under debate as a proof for your argument.

Click to expand...

He never denied that premise, though, and I didn't use it as proof. He is saying Nokia would have been better without WP or Android, and I'm asking him how. The money is not disputable, either.

And yet there are still apologists who regurgitate narratives brought into the world by the clown Elop.

Some insist on the the fable that Nokia was better off for not keeping an Android option. After all, Samsung has proven to be such a formidable competitor in that space.

The reality is that Elop made sure that noone will ever know if Nokia might've done better than HTC, LG or Sony. What we did establish is that the Windows Phone strategy ended up killing Nokia's handset business. The fact that Android might not have worked out is no longer an argument.

Elop was the captain of the boat that was sent to rescue Nokia's handset business. It was in trouble. No question about it. But he decided that rather than Nokia run the risk of drowning on its sinking platform, Nokia would be better off with a quick death by torching it.

I don't know that Elop is a turncoat. I'm not sure that evil genius beats blundering fool. I do know that he burned through all of Nokia's cash, lost 9 out of 10 handset customers, and got thousands of people unemployed. And in the end got a golden parachute for it. Either way, Microsoft can't seriously consider him for a future CEO role. Give the company a little more credit than that.

Speaking of the software company called Microsoft. It clearly wants to be in the consumer space very badly. So here's a novel idea. How about they start selling some software?

There's is now a unified single mobile platform out there that represents close to a billion potential customers. That's an unprecedented business opportunity. So you're not in the driving seat when it comes to the operating system. That's not a huge problem. Sell those customers Office (Sharepoint). Sell them Outlook (Exchange). Sell device management for businesses, sell XBox interoperability. Microsoft is uniquely positioned to be able to capitalize on the Android opportunity.

Legend

Well I don't get why MSFT bought Nokia, putting polemics about Elop and the MSFT/Nokia "relationship" aside.
I don't think that the brand has the strength it used to have and that they can back pedal on that front.
In that context 7 billions is a lot, are Nokia patent worth that much?
Another thing that surprise me is that Nokia is not making its own SoC which is weird to me as it looks like MSFT want to get involved in hardware more and more (that is mistake imo they should go for Korean and Chinese integrators on the ARM front and Intel on the other end).

If MSFT want to sell their own devices I think they are better off selling them under the name.
I'm not sure about how MSFT can fight back Google and actors like Samsung, on the other end trying to become the new Apple sounds risky too.
My views are that MSFT should mimic Google, release real good hardware for cheap and try to get traction so other actors are attracted to their software platform. In that context the Surface pro is fine, but the plain Surface were completely out of place. My belief is that a 199$ 7/8" inch surface and 299$ 9/10" one would have done a lot more good to Windows RT, it is imo hardly disputable.
I don't see what Nokia brings to MSFT if they insist on trying to sell devices at an Apple type of premium (or competing with high Samsung phones) /a strong focus on highest end gear.
Amazon various Kindle makes MSFT efforts look like a joke...

Legend

Microsoft is uniquely positioned to be able to capitalize on the Android opportunity.

Click to expand...

I both agree and disagree, they have what it takes but they are late and late again to the game. Not too mention they are making mistakes after mistakes.
Windows RT tanked, Winphone8 does hardly better, they are facing a growing user and software base in the camp of the competition. Actually for the sake of helping the mobile penetration they are hurting vanilla Windows.
The way they wanted to unify thing is not working, I'm still waiting for the facebook application on Windows 8. Simply put if you have a desktop or laptop, pretty much you might stick to your browser (or web apps for the adventurous...).
In their quest of unification they manage to split the still pretty humongous Windows user base, which is an awesome feat, too bad Jobs is no longer here but sometime it is almost as if I could hear him laughing his ass off from the hereafter...

VeteranSubscriber

Apple doubled in value one year and then went back down to where it came from the next and now back up to somewhere in the middle, even though nothing really changed along the way. Or even better, it told us Apple was worth $200 one day, $120 a few weeks later, $190 another few months later, and then $82, right before it's unstoppable climb to said $700. During this whole time, Apples fundamentals only went up up up.

That market made Nvidia go up by 100% in a few weeks of January 2011 and then halved back to where it came from during next.

That market also thought AMD was worth $4 one year ago, less then $2 6 months later and $4.5 yet another 4 months later.

The market has spoken and could not be any clearer.

Click to expand...

If you can manage explain me what the market told me in the cases above, far bigger than 35% and 8%, maybe I can convince myself to read past this last sentence of yours.

I guess the most uplifting thing in this whole thread is that it took almost a full week before somebody thought it wise to use short term stock market movements as a crutch for his arguments, so there's that.

LegendVeteranSubscriber

I don't know that Elop is a turncoat. I'm not sure that evil genius beats blundering fool. I do know that he burned through all of Nokia's cash, lost 9 out of 10 handset customers, and got thousands of people unemployed. And in the end got a golden parachute for it. Either way, Microsoft can't seriously consider him for a future CEO role. Give the company a little more credit than that.

Click to expand...

The reason Microsoft is giving him a golden parachute is proof that bringing Nokia to its knees and selling it for cheap to Microsoft was the main agenda from the start.

To any reasonable person's eyes, he was a complete maniac whose decisions brought the fastest decline of any major corporation in the history of mankind.
But to Microsoft's eyes, he's the trojan who successfully bombed the world's most powerful company in the mobile world (IP-wise, at least) in order to devalue it for a bargain bin purchase in the end.

It doesn't matter if he successfully corrupted the whole BoD and key investors with millions of dollars to off-shore accounts or just managed to use his pretty smile, but he did it.
He's a friggin' genius. In fact, the guy's so good that even after all this there are still people in this generally well-informed forum who back his actions as being for Nokia's best interests.
After completely destroying the company, people still back him up! How crazy is that?

That said, of course he's a candidate for Microsoft's CEO.
He emanates a powerful reality destortion field, he plays nice in front of the cameras, he has destroyed other companies to Microsoft's advantage, he's cold-hearted enough to make tens of thousands of people jobless to Microsoft's advantage and he probably feels absolutely no regret for it.
He's the perfect candidate for Microsoft's CEO.

Apple doubled in value one year and then went back down to where it came from the next and now back up to somewhere in the middle, even though nothing really changed along the way. Or even better, it told us Apple was worth $200 one day, $120 a few weeks later, $190 another few months later, and then $82, right before it's unstoppable climb to said $700. During this whole time, Apples fundamentals only went up up up.

(...)

If you can manage explain me what the market told me in the cases above, far bigger than 35% and 8%, maybe I can convince myself to read past this last sentence of yours.

Click to expand...

What I find weird is that you're comparing a market reaction that happened within instants after an official statement to a change that happened during months.

The 35% and 8% changes were a reaction to the deal and nothing else.
Apple's stock fluctuations that happen during months and years didn't happen because of a single deal or announcement. They happened because of thousands of news/rumours about stuff that happened with the competition, news/rumours about deals with suppliers, news/rumours about court decisions on IP struggles, news/rumours on purchasing companies, reactions to keynotes, whims of some big stockholders that influence the decisions of the smaller ones, etc.

Was there a single event that prompted an 8+% change in apple's stock price within instants during the last 3 years? I'd be surprised if you find one.
(That's a $40 delta for the current $500 share price btw.)

Veteran

If you can manage explain me what the market told me in the cases above, far bigger than 35% and 8%, maybe I can convince myself to read past this last sentence of yours.

Click to expand...

Actually that was the reaction on the very day of the announcement. The volume was also extraordinary.

Perhaps you could come up with examples of similar stock movements that actually make for a meaningful comparison if you gave it some thought.

But I'm really not interested in arguing that stock market psychology is rational, particularly in tech. I do think it is notable that the market's gut reaction said Ballmer bought another stinker. After Skype, who can blame it?

About Us

Beyond3D has been around for over a decade and prides itself on being the best place on the web for in-depth, technically-driven discussion and analysis of 3D graphics hardware. If you love pixels and transistors, you've come to the right place!